60% of Fortune 500 Companies Running ManageEngine

More than 50,000 customers now use ManageEngine's software to manage enterprise IT systems -- including three out of five Fortune 500 companies.

More than 50,000 customers now use ManageEngine’s software to manage enterprise IT systems — including three out of five Fortune 500 companies. Zoho Corp., a privately held, self-funded company, has built both ManageEngine and Zoho — a SaaS rival to Google Apps. So how is ManageEngine engaging MSPs? And what are the potential synergies between ManageEngine and Zoho? Raj Sabhlok, president of Zoho Corp., offered some perspectives during a recent conversation at the company’s Pleasanton, Calif., offices.

The story starts during the dot-com implosion a decade ago. At the time, Zoho focused mainly on a set of tools that became WebNMS — a management system mainly for OEMs in the telecom market. When the dot-com implosion upended the telecom market, Zoho Corp. (formerly called AdventNet) looked for new markets to infiltrate. Over time, those efforts emerged as ManageEngine (IT management for enterprises and managed services providers) and Zoho (SaaS productivity and business applications).

Home-grown IT Management

Zoho Corp. built ManageEngine from the ground up, delivering a common dashboard for network monitoring and application management. The company is self-funded with no venture capital and no plans to go public. The idea was to disrupt established IT management players like CA Technologies, BMC, Hewlett-Packard OpenView and IBM Tivoli. ManageEngine targeted enterprise and mid-market IT managers from the start, with managed services providers (MSPs) also a prime customer base. Indeed, 12 to 15 percent of ManageEngine’s customers are MSPs that typically serve mid-market organizations, says Sabhlok.

With ManageEngine, “we wanted the world to realize IT management didn’t need to be complex,” says Sabhlok. “We built software that can be evaluated over the web.”

A few examples:

OpManager was ManageEngine’s first offering in the network management market and tends to compete head-on with SolarWinds, asserts Sabhlok.

More recently, ManageEngine’s ServiceDesk Plus has emerged as the company’s top seller, Sabhlok says.

ManageEngine has also been focusing on it’s IT360 suite, tying together network, application, server and service desk capabilities into a single platform. “It’s really what the Big 4 promised 20 years ago,” says Sabhlok, referring to CA, BMC, HP and IBM. “But we can get you up and running in weeks rather than months and years, and at a fraction of the cost.”

Meanwhile, Zoho Corp. has also built out Zoho — the SaaS suite for businesses. And there are some synergies between Zoho SaaS applications and ManageEngine’s network management offerings. A prime example: Zoho Reports, released last year, offers reporting and analytics that integrate with ManageEngine’s software. As a result, MSPs can take all of their IT management data and populate Zoho Reports, producing timely reports for partners and customers.

Unique Business Model

To keep expanding, roughly 90 percent of ManageEngine’s staff focuses on software development, and roughly 40 percent of revenues are plowed back into R&D, while less than 20 percent involve sales and marketing.

Company officials say there’s no need to pursue an IPO (initial public offering) or venture capital because ManageEngine and Zoho have leveraged the self-funding, heavy R&D model for more than a decade.

That R&D will help ManageEngine to support a “renaissance in IT management,” says Sabhlok. And hardly surprising, the company continues to expand its software portfolio.

Among the key additions: ManageEngine’s Configuration Management Database (CMDB) will be on display at this week’s Help Desk Institute (HDI) conference in Orlando. CMDB lets MSPs track and manage customers’ IT assets in a single repository.

Also, ManageEngine has been assisting MSPs in such areas as password management, directory management and vulnerability management.

Next Moves

So what’s next for ManageEngine? The company has several surprises planned for MSPs in the May timeframe. But the overall business strategy — pouring about 40 percent of revenues back into R&D — remains unchanged. With one or more ManageEngine applications running in 60 percent of Fortune 500 companies, it’s hard to argue with the strategy.

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